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                                                                   EXHIBIT 10.42

[AUTOWEB.COM LOGO]


December 16, 1998


PRIVATE & CONFIDENTIAL

Mr. Dean DeBiase
1565 Kathryn Lane
Lake Forest, IL 60045


Dear Dean:

Autoweb.com, Inc. (the "Company") is pleased to offer you a position as
President and Chief Executive Officer of the Company and a position on its
Board of Directors, on the terms set forth in this letter agreement, effective
upon your acceptance by execution of a counterpart copy of this letter where
indicated below.

     1.   Reporting Duties and Responsibilities; Employment at Will; Board
Matters. In this position you will report to the Board of Directors of the
Company. This offer is for a full-time position, located at the offices of the
Company, except as reasonable travel to other locations may be necessary to
fulfill your responsibilities. Your employment with the Company is on an "at
will" basis, and either you or the Company may terminate your employment with
the Company at any time, for any or no reason. Upon your commencement of
employment as the Company's Chief Executive Officer, the Board of Directors will
elect you to fill a position on the Company's Board of Directors, and while you
remain the Chief Executive Officer of the Company, the Board of Directors will
continue to nominate you for a position on the Board of Directors of the
Company. Your full-time employment (at full pay and benefits) will begin on
January 1, 1999, although you will commence employment on a part-time basis
(without pay or benefits) upon execution of this letter agreement.

     2.   Salary and Vesting Continuation.


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          (a)  If the Company terminates your employment for any reason other
than Cause (as defined below), then the Company will (i) pay you a lump sum
payment in an amount equal to twelve (12) months of your then current salary,
and, if your termination occurs prior to December 31, 1999, you shall also be
entitled to the payment of the guaranteed bonus described below to the extent
it has not already been paid to you; (ii) allow you to continue to participate
in all pension, profit-sharing and any other retirement plans of the Company
that you are participating in at the time of your termination for the twelve
(12) month period following your termination, solely for the purpose of
permitting you to continue to vest in such plans; and (iii) allow you to
continue to participate in the Company's medical and other insurance plans for
the twelve (12) month period following your termination, at the Company's
expense. In exchange for the foregoing compensation, you agree for a period
equal to the lesser of one (1) year following your termination or the number of
months you were employed by the Company as of your termination not to (i) engage
or participate in any effort or act to solicit the Company's customers,
suppliers, employees or contractors to cease doing business or their employment
or association with the Company or (ii) engage as an individual proprietor,
partner, stockholder, officer, employee, director, joint venturer, lender or in
any capacity whatsoever (otherwise than as a holder of not more than one percent
(1%) of the total outstanding stock of a publicly held company) in any business
enterprise which offers products or services that directly compete with products
or services offered by the Company at the time of your termination or
resignation. "Business enterprise" for the purposes of the preceding sentence
shall refer only to the division, subsidiary or business unit that you are
engaged with, and you shall not be deemed to be in direct competition if the
business enterprise you are engaged with is not in direct competition with the
Company even though some other business enterprise that is affiliated with the
business enterprise you are engaged with may be in such competition. The Company
further agrees to pay any "parachute payment" excise tax which may be imposed on
you as a result of any payments under this paragraph.

          (b)  In the event of a Change of Control, seventy-five percent (75%)
of the greater of (i) the stock options to acquire Company securities granted
to you pursuant to this letter and (ii) the securities of the Company
(including stock options) that you hold as of the date of the Change of Control
that are unvested, will immediately vest on the date of the Change of Control.

          (c)  If during the first twelve (12) months following a Change of
Control, the Company (or the surviving company if the Company is not the
surviving company as a result of a merger or consolidation which is a Change of
Control) terminates your employment for any reason other than Cause or you
resign your employment with the Company as a consequence of a Constructive
Termination (as defined below), then any securities of the Company held by you
that are unvested as of the date of termination of your employment will
immediately vest.

          (d)  For purposes of this agreement, the following terms shall have
the following meanings:

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Mr. Dean DeBiase
December 16, 1998
Page 3


               (i) "Cause" shall mean (i) material and willful violation of any
federal or state law; (ii) conviction of any act of fraud with respect to the
Company; or (iii) conviction of a felony or a crime causing material harm to
the standing and reputation of the Company.

               (ii) "Change of Control" shall mean (i) the sale, lease,
conveyance or other disposition of all or substantially all of the Company's
assets as an entirety or substantially as an entirety to any person, entity or
group of persons acting in concert; (ii) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
becoming the "beneficial owner" (as defined in Rule 13(d)-3 under said Act),
directly or indirectly, of securities of the Company representing more than 50%
of the total voting power represented by the Company's then outstanding voting
securities; (iii) a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 50% of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation;
or (iv) the liquidation or winding up of the business of the Company.

               (iii) "Constructive Termination" shall mean that the Company,
without your prior written approval, has (i) materially reduced your title,
authority or responsibilities; (ii) reduced your salary or bonus plans; or
(iii) relocated your principal place of work by a distance of more than 50
miles.

You agree that the payments set forth in this offer letter, including paragraph
3 below, constitute all payments (except for accrued vacation and salary) that
you shall be entitled to in the event of any termination of employment.

     3.   Salary; Bonus; Benefits and Vacation; Relocation. Your base salary
will be $250,000 per year payable in accordance with the Company's customary
payroll practice as in effect from time to time. Unless your employment is
terminated by the Company for Cause prior to December 31, 1999, you will also
be paid a $100,000 bonus as follows: $50,000 on June 30, 1999 and $50,000 on
December 31, 1999. In no event will your annual base salary be reduced below
$250,000 during your employment by the Company. The Company agrees that it
shall establish bonus plans each fiscal year during your employment in which
you shall be entitled to participate and pursuant to which you shall have the
potential to earn at least $100,000 per fiscal year, subject to achieving any
performance objectives or satisfying other requirements under the bonus plans.
You will receive the Company's standard employee benefits package, and will be
subject to the Company's vacation policy, as such package and policy are in
effect from time to time; provided that (i) you will immediately be entitled to
three (3) weeks of paid vacation each year and (ii) you will be entitled to
immediate coverage under the Company's health, dental, disability and life
insurance plans commencing January 1, 1999. You will also be entitled to be
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Mr. Dean DeBiase
December 16, 1998
Page 4

reimbursed for up to $120,000 of reasonable documented commuting, interim
living, relocation and other miscellaneous expenses incurred by you and your
family in connection with traveling and relocating to the San Francisco Bay
area in connection with accepting employment with the Company.

      4.    Option and Stock Issuance.

            (a)   Option. Promptly following your commencement of employment
with the Company but in no event later than January 31, 1999, the Company will
issue you an option to purchase 923,210 shares of the Company's common stock at
an exercise price of $0.75 per share. This option will be an incentive stock
option to the maximum extent possible, will be immediately exercisable, and
will vest as follows: 25% will be vested upon grant and the balance will vest
on a pro rata monthly basis over three years commencing on the first
anniversary of the date of grant; provided that an additional 20% of the
original stock option grant will become vested upon the Company's initial
underwritten public offering of its securities. This option may be exercised by
you at any time up to ten (10) years following the date of grant of the option,
provided that following termination of your employment you may only exercise
the option to the extent it is vested.

      (b)   Stock. Until March 31, 1999, as long as you are an employee of the
Company you will have the option to purchase up to 263,774 shares of the
Company's Series D Preferred Stock at $3.55 per share. Your payment for this
stock may be in cash or, to the extent the Company's common stock is publicly
traded, with same day sale proceeds or pursuant to a net exercise of the
option. If the payment is in cash, it shall be in the amount of no less than
$250,000, with the balance, if any, to be financed by an interest free full
recourse promissory note secured by the stock. This note will be due and
payable on the third anniversary of the date of issuance of the stock.

      5.    Confidential Information. As an employee of the Company, you will
have access to certain Company confidential information and you may, during the
course of your employment, develop certain information or inventions that will
be the property of the Company. To protect the interest of the Company, you
will need to sign the Company's standard "Employee Inventions and
Confidentiality Agreement" in the form previously provided to you as a
condition of your employment. We wish to impress upon you that we do not wish
you to bring with you any confidential or proprietary material of any former
employer or to violate any other obligation to your former employers.

      6.    At-Will Employment. While we look forward to a long and profitable
relationship, should you decide to accept our offer, you will be an at-will
employee of the Company, which means the employment relationship can be
terminated by either of us for any reason at any time, with or without cause or
advance notice. Any statements of representations

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Mr. Dean DeBiase
December 16, 1998
Page 5


to the contrary (and, indeed, any statements contradicting any provision in
this letter) should be regarded by you as ineffective. Further, your
participation in any stock option or benefit program is not to be regarded as
assuring you of continuing employment for any particular period of time.

     7.   Authorization to Work. Because of Federal regulations adopted in the
Immigration Reform and Control Act of 1986, you will need to present
documentation demonstrating that you have authorization to work in the United
States. If you have any questions about this requirement, which applies to U.S.
citizens and non-U.S. citizens alike, please contact our human resources
department.

     8.   Term of Offer. This offer will remain open until December 17, 1998.
If you decide to accept our offer, and I hope that you will, please sign the
enclosed copy of this letter agreement in the space indicated and return it to
me. Upon your signature below, this will become our binding agreement with
respect to the subject matter of this letter, superseding in their entirety all
other or prior agreements by you with the Company as to the specific subjects
of this letter agreement, and will be binding upon and inure to the benefit of
our respective successors and assigns, and your heirs, administrators and
executors. This agreement may not be assigned by you. This agreement will be
governed by California law, and may only be amended in a writing signed by you
and the Company. In the event of any conflict between the terms of this letter
agreement and the relevant terms of relevant Company benefit plans, the terms
of this letter agreement shall control.

     We are excited to have you join us and look forward to working with you.


Sincerely,

Autoweb.com, Inc.

By /s/ PAYAM ZAMANI
  -------------------------------
   Payam Zamani, Co-Founder, President and CEO

Acknowledged, Accepted and Agreed:                Date:

/s/ DEAN DEBIASE                                  12/16/98
---------------------------------                 ----------------
Dean DeBiase
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To:    Dean DeBiase
From:  Autoweb.com, Inc.
Date:  March 30, 2001


Dear Dean,

     By your signature below, you hereby agree and acknowledge that this letter
will supersede and void that certain letter agreement dated January 3, 2001 in
its entirety, and will furthermore clarify and amend your original offer letter
of employment dated December 16, 1998 (the "Offer Letter").

     Paragraph 2(c) of the Offer Letter is hereby amended and restated in its
entirety to read as follows:

     "(c) If, during the first twelve (12) months following a Change of Control,
     the Company (or the surviving company if the Company is not the surviving
     company as a result of a merger or consolidation which is a Change of
     Control) terminates your employment for any reason other than Cause or you
     resign your employment with the Company as a consequence of a Constructive
     Termination (as defined below), then (i) any shares of stock of the Company
     and options to purchase shares of stock of the Company held by you, your
     family trust or the Dean A. DeBiase Jr. and Logan P. DeBiase Trust #1
     that are unvested as of the date of termination of your employment will
     immediately vest, (ii) you will receive the benefits and amounts referenced
     in subsection (a) of this paragraph above (including upon your resignation
     as a consequence of Constructive Termination), and (iii) in addition to any
     other amounts owed to you hereunder, you will be paid an amount equal to
     your annual incentive bonus for the most recently completed calendar year
     multiplied by a fraction, the numerator of which is the number of days in
     the current calendar year through your date of termination, and the
     denominator of which is 365, which amount shall not exceed 35% of your
     total then current annual salary."

The last sentence of Paragraph 4(a) is hereby amended and restated in its
entirety to read as follows:

     "Notwithstanding anything in any stock option agreement to the contrary,
     the option promised hereunder, or any successor option granted to you
     after a Change of Control, may be exercised by you at any time up to ten
     (10) years following the date of grant of the original option, provided
     that following termination of your employment you may only exercise the
     option to the extent it is vested."

     By your signature to this letter, you agree to forego severance or similar
benefits under any plan or policy of the Company now or hereafter in effect or
any agreement with the Company, other than the Offer Letter as clarified and
amended by this letter and other than COBRA benefits.
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                                       Sincerely,

                                       AUTOWEB.COM, INC.

                                       By: /s/ JEFFREY SCHWARTZ
                                           ----------------------------
                                           Jeffrey Schwartz
                                           Chief Executive Officer


By:    /s/ DEAN DEBIASE
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       Dean DeBiase

Dated: 3/30/01
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